Status: Some residential customers in the state have access
to unbundled service.

Overview: Unbundled natural gas service is available for
some residential customers, but the lack of marketer participation in South
Dakota makes it generally impractical for most. Transportation service, with no
minimum volume requirements, has been available to all customers of two of South
Dakota's three major local distribution companies (LDCs) since the mid-1990s.
However, of the dozen or so marketers active in South Dakota, few, if any, have
found it economic to enter the residential market. Also few, if any, residential
customers have arranged for separate transportation service because of the
difficulties involved, such as telemetering costs and nomination requirements.
The two distributors that offer transportation service with no minimum volume
requirements are MidAmerican Energy Company and NorthWestern Public Service.
Montana-Dakota Utilities also offers transportation service, but the minimum
requirement of 2.5 million Btu per hour makes it impractical for residential and
other small-volume customers.

EIA State Data: In 2000, South Dakota had 142,075
residential and 19,100 commercial customers. They consumed 13 and 10 billion
cubic feet of natural gas, respectively. The average prices paid for natural gas
purchased from LDCs by residential and commercial customers were $7.34 and $6.05
per thousand cubic feet, respectively. The average city gate price in South
Dakota was $4.81 per thousand cubic feet.

Eligibility/Participation in Retail Choice Programs:

Customer Data for Three Major LDCs as of December 2001

Local Distribution Company

Number of Customers (All
Sectors)

Number of Transportation
Customers (All Sectors)

MidAmerican Energy Company

69,800

140

Montana-Dakota Utilities

39,700

45

NorthWestern Public Service

40,300

80

Total

149,800

265

Source: South Dakota Public Utilities Commission (December
2001).

South Dakota: Regulatory and
Legislative Actions on Retail Unbundling

Summary:The South Dakota Public Utilities Commission
(PUC) approved transportation tariffs in the mid-1990s for two LDCs operating in
the state. In 1996, at the urging of some marketers, the PUC decided to consider
adopting standards of conduct for LDCs and their affiliates. The PUC staff
promulgated such rules in 1997, but after a hearing, the rules were rejected
because there had not been any complaints as to abuse of affiliate
relations.

Regulatory and Legislative
Actions

Legislation

3/96

Flexible
Rates, SB144. Authorizes PUC to permit flexible and competitive
rates on a case-by-case basis. Utilities could charge a "business
development rate" if the PUC finds it in the public interest.

Incentive Gas Supply
Procurement Program (IGSPP) Approved, Final Decision and Order
NG98-010.PUC approved continuation of MidAmerican Energy
Company's IGSPP for another 3 years, or until its purchased gas adjustment
is eliminated, whichever comes first.

10/97

Order Rejecting Proposed
Standard of Conduct Rules, RM97-002. The PUC voted to reject
proposed rules governing standards of conduct for LDCs and their
affiliated marketing entities after determining that there had been no
complaints regarding conduct of LDCs and their affiliates.

8/96

Proposed Standards of
Conduct. Staff directed to formulate LDC/Affiliate Standards of
Conduct Rules. In March 1996, the PUC denied PAM Natural Gas' (PNG)
request to adopt emergency rules governing LDCs, their agency business and
affiliated marketing entities. Instead, the PUC opened docket NG96-011 to
investigate establishing standards of conduct rules. Comments were
solicited as to whether to adopt any rules and if so what rules should be
considered.